The post Stake.us Sued in Alabama for Allegedly Hiding Behind Sweepstakes Laws to Offer Real-Money Gambling appeared first on Vegas Slots Online News.
“Old gimmick”
Stake.us., the “social casino” version of cryptocasino Stake, is the target of yet another lawsuit. This time it’s in the US District Court for the Northern District of Alabama, where Laura Hall and others have accused the site of operating an illegal gambling business.
the two currencies used on Stake.us are technically fake money
The primary focus of the legal action is Stake’s use of two different in-game currencies: Gold Coins and Stake Cash. Unlike on its full-fledged, real-money online gambling site, the two currencies used on Stake.us are technically fake money. It’s that “technically” modifier that the complaint has problems with.
Stake.us says it is legal because it is not a gambling site, but rather a social casino and “sweepstakes” site, where even though people can spend real money, there is no real-money value to Gold Coins or Stake Cash, thus there is no gambling. But the lawsuit begs to differ, saying that the sweepstakes claim is “an old gimmick that was once popular among criminals in the early 2000s.”
Stake has previously been sued in California and Illinois.
Gold Coins vs. Stake Coins
To understand the lawsuit’s issue with Stake.us, we first need to understand how the site works. On the surface, it is your typical social casino. Players get Gold Coins for registering, for daily bonuses and promotions, and, of course, for winning at the casino games. Like with any play-money site, all of that is free and there are no real prizes to be won.
Players can also buy Gold Coin bundles, and this is the big point of contention in the lawsuit. With those bundles can come Stake Coins, which are what would be called in other, traditional online games, the “premium currency” of Stake.us. Players can gamble with Stake Coins (which can also be earned through promotions), and once they meet certain requirements, can redeem them for cryptocurrency.
Stake Coins can be converted into something with real-world value
Thus, even though the Stake.us in-game currencies technically have no real-world value, Stake Coins can be converted into something with real-world value. Real money with extra steps, basically. So while people don’t deposit actual currency onto Stake.us, they can still buy fake currency, gamble with it, and turn it into real currency (well, cryptocurrency that can then be converted into real currency).
“Stake attempts to separate the element of consideration from chance by offering a two-tiered system of virtual coins, both of which function like casino chips, while calling the whole affair a ‘sweepstakes,’” the lawsuit argues.
Compared to internet cafes
The “gimmick that was once popular among criminals in the early 2000s” reference earlier has to do with the old internet cafes that served as fronts for gambling businesses. Back in the day, before everyone had internet at home and on their phones, many people would pay to use the internet at internet cafes. And before everyone had unlimited long-distance calling, pre-paid calling cards were common (I bet I could find an old one in a box of random junk in my office closet).
Most internet cafes were completely legit, places where one could hop online, grab a drink and a snack, and relax. But some, the ones referenced in the lawsuit, were just illegal gambling businesses. People would buy internet time or phone cards and receive credits to play on gambling machines in the store.
Hence the comparison to Stake.us, where users can buy one thing and receive another that can effectively be used to participate in real-money gambling.
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